• Define Capacity• Explain What is meant by ‘Capacity Planning’• Describe the Types of Capacity Planning• Explain Operations Scheduling and Workplace Planning• Describe the Types of Operations Scheduling• Explain What is Aggregate Planning• Explain the Strategies of Aggregate Planning• Explain Production Planning and Control• Explain the Inventory Models• Describe the Principles of Material Handling• Explain Planning and Scheduling Maintenance• Explain Waiting Line (Queue) Management• List the Characteristics of a Queue System• Explain the Principles of World Class Manufacturing• Describe World Class Manufacturing Techniques

Course Objectives

Introduction

Henry Gotham is a supervisor at one of Kirk & Patrick Car manufacturing

plants.

Like any other supervisor in the low level management,

he is responsible for assigning of jobs and tasks to various workers at the plant to meet the daily, weekly as well as monthly production

levels and schedules.

Introduction

He also guides and instructs the workers for day to day activities and is responsible for the quality as well as quantity of production.

Henry ensures that the resources are put to the optimum use and the quality of the products is maintained.

He is also responsible for reporting on the daily status to the higher management of the production schedules, produced quantity of goods etc.

Introduction

Recently, when the budget was announced by the

government, they decreased the price of gasoline and

diesel by a significant amount.

Due to this, there was a sudden surge in the demand

for cars because almost everyone wanted to buy a

car as fuel prices were more affordable now.

Introduction

The management passed on instructions to its manufacturing plant that they wanted at least an increase of 15% in the daily production level at the

plant.

The management hopes that this increased production levels would help meet the current market demand and the company can make huge profits

from this situation if they succeed in meeting this surge in demand.

Introduction

Henry’s boss, Gerard Butler calls him for a meeting to

discuss the situation.

He informs Henry that the production levels have to be

increased.

However, Henry informs Gerard that there are not enough inventories of raw

materials to meet the increase in production

quantity.

Introduction

Gerard passes on the information to the higher management who realize

that this is a grave situation and that they just do not

have enough raw materials to increase their daily

productivity limits.

Gerard suggests that could contact the suppliers and try to procure the raw materials.

Introduction

However, when the suppliers are contacted, they inform Gerard that they would not be able to supply the required raw materials before another

three months due to the huge demand from all sides.

Gerard discusses the situation with the higher management.

Introduction

Gerard as well as the management knows that they have failed to take

advantage of the increased market demand and have

failed to make huge profits out of the situation.

You have seen how Kirk & Patrick Car Manufacturers failed to meet the current

market demand as they were not able to increase the

capacity of their manufacturing plants.

Introduction

Hence, you can understand that it is extremely crucial

that the capacity of the plant should be planned properly

keeping in mind such situations where the plant may be required to over-produce as well as under-produce than its normal

productivity levels.

Introduction

Therefore, ‘Capacity Planning’ can be the

competitive advantage that can help an organization to succeed and help fulfil the objectives and strategies of

the organization.

Let us now learn about ‘Capacity Planning’

in detail.

Definition - Capacity

In Operations

For an OrganizationIn General Terms

‘Capacity’ is the ability of a given system to produce output within the specific time period.

‘Management Capacity’ is referred as the amount of input resources available to produce relative output over period of time.

‘Capacity’ is referred to as maximum production capacity, which can be attained within a normal working schedule.

What is meant by ‘Capacity Planning’?

• ‘Capacity Planning’ is essential to be determine the optimum utilization of resources and plays an important role in decision-making process such as for, extension of existing operations, modification to existing product lines, starting new products, etc.

What is Strategic Capacity Planning?

• ‘Strategic Capacity Planning’ is crucial as it helps the organization in meeting the future requirements of the organization.

• Planning ensures that operating costs are maintained at a minimum possible level without affecting the quality.

• It ensures that the organization remain competitive and can achieve its long-term growth plan.

Factors Affecting Capacity PlanningThere are several factors that affect the efficiency and effectiveness of capacity planning such as follows:

Production Technology Product Line or Matrix

External Structure (such as policies, safety regulations etc.)

Operational Structure (such as scheduling, quality assurance etc.)

Human Capital (such as job design, compensation etc.)

Production Facility (such as layout, design, and location etc.)

Types of Capacity Planning

The three types of capacity planning based on goal are:

Lag Strategy Planning

Lead Capacity Planning

Match Strategy Planning

Roll your mouse over the icon, to

learn more.

The following are the main objectives of operations scheduling:

Proper utilization of work centers

Reducing time of job on machines

Due importance to delivery date and to avoid delays in completion

Objectives of Operations Scheduling

Roll your mouse over the icon, to

learn more.

Principles of Operations Scheduling‘Operations Scheduling’ is arrived at based on the following

principles:

Ensure continuous job schedule

End to end completion of job

Ensure feedback so as to make adjustments

What is Aggregate Planning?

• ‘Aggregate Planning’ is the process of working out production requirements for a medium range by working backwards from the final sales unit to raw materials required.

• ‘Aggregate Planning’ is an operational activity critical to the organization as aims at balancing the long-term strategic planning with short term production success.

Overview of Production Planning and Control

• It is essential to

integrate the production

planning and control

system for efficient,

effective and

economical operation in

a manufacturing unit of

an organization.

Factors affecting Production Control‘Production Control’ cannot be the same across all of the organization. ‘Production Control’ is dependent upon the following factors:

Nature of Production (job oriented, service oriented, etc.)

Nature of Operation

Size of Operation

‘Independent Demand Inventory Model’ talks about raw material demand which is dependent upon prevailing market conditions and is not correlated to any raw material currently used by the organization.

Finished goods are an appropriate example for independent demand inventory model.

Independent Demand Inventory Model

1Inventory Model

IndependentD

eman

d

Material Requirement Planning

One of the crucial components of a production plan is material and manufacturing planning system.

‘Material Requirement Planning’ plays a pivotal role in assembly-line production.

Waiting Line (Queue) Management

‘Queue Management’ deals with cases where the customer arrival is random; therefore, service rendered to them is also random.A service organization can reduce cost and thus improve profitability by efficient queue management.

Service Configuration

4Service Configuration

• Another aspect of waiting line management is the service configuration.

• There are four types of service configuration, and they are as follows:o Single Channel, Single Phaseo Single Channel, Multi Phaseo Multi Channel, Single Phaseo Multi Channel, Multi Phase

Let us now look at a real life example to

understand the characteristics of a

waiting line in different situations.

Real Life Example

Situation #1: Doctor’s Office

Situation #1: Doctor’s Office

The following are the characteristics of the waiting line (queue) in a Doctor’s Office:

• Arrivals: The ‘Arrivals’ here are the individual patients who come to visit the doctor for treatment.

• Arrival Process: The patient’s arrival is in single. • Pattern of Arrivals: The patient’s arrival is scheduled due

to prior appointment with the doctor’s office.• Behavior of the Arrivals: The Arrivals in the doctor’s

office join the queue, and wait until they are served.• Channel: This is a single channel system where the

individual doctor is the server who will cater to the needs of the arrivals (patients).

• Phase: This is a single step service process where a single step is involved in getting service.

• Queue Discipline: The patients are served in the order of their appointment time as well as their presence at the time of appointment at the doctor’s office.

• Service Configuration: Single Channel, Single Phase

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